In this section

Die Veneris, 28 Maii 1830.

[491]

Robert Rickards Esquire is called in, and further examined as
follows:

Will you turn to No. 2. of the Account of Finances of India
which has been laid before this Committee, Page 14; what is that
Account?

It is an Account of the Total Annual Amount of the Revenues
and Charges of the several Presidencies in India from the Year
1809-10 down to the Year 1826-27.

What appears upon that Account to be the Surplus Revenue
and Surplus Charge for those Years?

The Two last Columns of this Account, entitled "General
Result," contain, the one the Surplus Revenue, and the other the
Surplus Charge. I have cast them up; and the Surplus Revenue
appears to be £4,036,928, and the Surplus Charge £20,181,493;
therefore leaving a Surplus Charge on the whole Account of
£16,144,565, according to an Analysis which I beg leave to submit
to your Lordships Inspection. (fn. 1)

This Account is entirely confined to the Territorial Charges?
Entirely.

It professes to comprise all the Territorial Charges, both at
Home and in India?

In the Year 1813, similar Accounts that were then laid before
the Select Committee of the House of Commons professed to
contain, under the Head of "Charges," every Political Expence
incurred Abroad, including the increased Expenditure occasioned
by the Mysore, Mahratta and other Wars, the Egyptian Expedition,
and the Equipments for the Reduction of our European Enemies
in the Indian Seas; in the Words of the Committee, "every
Charge incurred in the Defence of their Possessions in India;"
I therefore presume that this Account No. 2. is drawn out on the
same Principles, and therefore contains, not only all the Charges
and Expences of a Period of Warfare in India, but the whole of
the Territorial Charges paid in England.

In your Opinion, is the Amount of Surplus Charge above
Revenue during those Years correctly stated?

[492]

I have always been of Opinion, since the Year 1813, that these
Accounts exhibited on the Face of them a large Surplus Revenue;
Official Documents, as well as authentic Writings, now extant,
confirm the Fact, that there has been a large Surplus Revenue
from our Territories in India ever since we got Possession of
the Dewanny in Bengal. It is so stated in Publications by
Mr. Verelst and Mr. Hastings, former Governors General of Bengal.
From these Publications we learn that large Sums of Money from
the Revenues were annually supplied for Purchases of Investments
for Europe and for China. On some Occasions the Court of
Directors were so anxious to procure Investments from Abroad,
that they directed their Governments in Bengal, not only to purchase
to a large Amount, but to send Home, Goods, even though those
Goods might be attended, upon the Sale of them in this Country,
with actual Loss. Ever since the Year 1793, regular Accounts
have been laid before Parliament similar to the one I have now
under Examination; and in the Year 1813 I published a small
Work containing an Analysis of those Accounts, in which it
appeared to me to be made out unanswerably, that the Excess of
Charges from 1793 to 1808-9 would in no degree account for the
Increase of the Indian Debt. It therefore followed that if the
Principal of the Indian Debt was not incurred on a Political
Account, the Interest on the Debt ought not to be inserted as a
Territorial Charge. The Sum of Interest paid on Debts for that
Period was £20,083,569, whilst the Net Increase of Debt for the
same Period was £20,905,194; it therefore took the whole Sum
of borrowed Money or Principal to pay the Interest alone during
the Period in question. The Way in which the Debt has occurred
is simply this: the Governments Abroad, in execution of the
Instructions they received for the Purchase of Investments for
Europe and China, send Orders upon the Revenue Treasuries of
different Parts of the Country in favour of the Commercial Residents, to the Amount of several Lacs of Rupees, to be applied as
required in the Purchase of Goods; this Revenue being abstracted
from the Territorial Funds, when Wars occur in India there is a
Deficiency for the Expences of those Wars, and then Loans are
recurred to to supply that Deficiency; but the Deficiency having
occurred in consequence of previous Advances being made to the
Commercial Department, it is clear that the Commercial Department ought to bear the Burden of that Loan, and not the
Territorial. If therefore the Principal of the Debt does not
appertain to the Territorial Head, it is quite clear that the Interest
on those Debts ought to be similarly excluded from this Account;
and if the Sum Total of that Column be deducted from No. 2. it
will leave an actual Surplus on this Account of £16,743,410,
besides other Items.

Putting the Debt entirely out of the Question, during a long
Series of Years, does it, upon the Accounts of The East India
Company themselves, appear throughout that the Revenue has
exceeded the Charge, notwithstanding the Expence attendant upon
Wars?

If the Debt is excluded from this Account, it is quite clear that
there has been a Surplus, after paying all the Territorial Charges
in England, from the Year 1809-10 to 1827-28, of the Sum I have
just mentioned, together with other Items, which in the Way of
Adjustment would also attach to this Account. As regards the
former Period, I have also shewn in another Place that a large
Surplus existed. (fn. 2)

In your Opinion, is the Debt solely or principally incurred by
Losses upon Remittances?

The only Inference to be drawn from this Fact is, that the whole
Debt must be Commercial, and therefore partly incurred from the
Manner in which Remittances to this Country are made.

In your Opinion, is a Loss upon a Remittance by Investment
rather than by Bill, to be charged upon Commerce and not on
Territory?

Certainly, upon the Commerce, in as far as the Advance is
made for Commercial Purposes.

Could the Territorial Charges incurred at Home be remitted
without Loss in any other Manner?

I conceive there can be no Difficulty at any Time in making a
Remittance in Bills, and more especially if the whole Trade were
in the Hands of Private Merchants.

Have there not been Periods in which the Loss upon Remittance
by Bills would have been very great?

[493]

On the contrary, the Remittance to this Country up to the
Year 1817 or 1818 has been very favourable; since that the
Exchange has fallen to Rates bordering upon the real Par, and
is now regulated by the same Rules and Laws which govern
Exchanges with every other Part of the World where Commerce
is free.

Have you endeavoured to form an Opinion as to what the
Exchanges would have been if the Remittance of those large Sums
had throughout taken place by Bills?

If the Trade had been as free as it is now throughout the
whole Period here adverted to, there can be no doubt that the
Exchange would have been regulated upon the same Principles
which now operate upon it.

You are aware that in the Year 1813, by the Act of Parliament establishing the present Charter, a Separation was established
between the Commercial and the Territorial Accounts of the
Company?

I have understood that it was so. I have read the Act of
Parliament; but I understand there was a Paper prepared and
printed, containing the Principles upon which the Separation
was ordered to take place; that Paper I have not seen; it has never
fallen into my Hands.

Are you not aware that previous to the Year 1813 the Commercial and Territorial Accounts were confounded, and that subsequently to that Period they have been separated, under the Act
of Parliament?

The Act of Parliament requires Separation of the Territorial
and Commercial Account ever since the Year 1813, but there has
been no such thing as a satisfactory Commercial Account laid
before the Public from that Time down to the present.

Are you not aware that by the Act of Parliament the Company
can only take from the Territory Sums in Repayment of Sums paid
by the Commerce for the Territory in this Country?

The Act of Parliament requires Advances to be made in India
sufficient to cover Territorial Payments in England; but it does
not, as I conceive, restrict Advances absolutely to that Limit, and
they would accordingly appear to have considerably exceeded it.

Do you mean that the Advances in India have been larger than
the Advances for the Territorial Purpose in England?

Yes; and here is an Account before me which shews it.

Are you not aware, that if that has been the Case both the
Directors of The East India Company and the Board of Controul
must have violated the Act of Parliament?

That is not for me to answer; as a Matter of Opinion, I should
say not; but in allusion to the Fact itself, here is an Account,
No. 13. of the Papers relating to the Finances of India and the
Trade of India and China, in which it is stated that the Total
Amount of Advances made to the several Presidencies and Settlements in India, for the Purposes of Commerce, in so far as regards
the Purchase of Investments to Europe, amount to £30,545,069
from 1814-15 to 1826-27, of which £24,338,050 were Sums in
Repayment of Territorial Charges defrayed in England; whereas in
the Account No. 2. the Territorial Charges paid in England
amount only to £18,833,065, leaving therefore an Excess of
Advance to the Amount of £5,504,985.

Are you aware that the Interest of the Indian Debt is first
charged in the Indian Accounts as a Debt incurred in India, and
that Sums are set apart in India, in the Account, to the Payment
of that Interest; but that a very large Portion of that Interest
being in fact paid in England, the Funds for the Repayment to
the Company of that Interest in England are remitted in
addition to such Funds as are necessary for the Repayment of
those Charges which appear as Territorial Charges in this
Account?

That beyond doubt is the State of the Case as the Accounts
are now arranged; but if the whole Revenues of India really yield
a Surplus over and above the actual Charges, it appears to be of
little Consequence, as regards that Surplus, whether those Charges
be wholly paid in India or partly in England; whilst, as to Interest
on Debt, that should only be paid, in my Opinion, out of that Fund
to which the Principal fairly belongs.

[494]

That is on the Supposition that you are correct in considering
that Debt as a Commercial, not a Territorial Debt?

Of course.

You have stated that the Sums issued in India for Investments
being issued for general Purposes, and the issuing of those Sums
making such a Deduction from the Revenues of India as occasions
an Increase of Debt for the paying of current Expences, particularly in Times of War, that Debt so incurred should be considered
as a Commercial, not a Territorial Charge, inasmuch as it is
incurred for making good the Deficiency occasioned by Investments
for Commercial Purposes?

I conceive that to be the Case; on the Supposition, always, that
there is that real Surplus Revenue which these Accounts appear to
exhibit.

If however this Opinion of yours be correct, that those Investments in India are made for Commercial Purposes, still, would
not an Excess of Debt incurred in a Number of Years, beyond
the Sums issued for Investment, be still chargeable to the Territorial
Revenues? For instance, if Two Millions were issued in any one
Year for Commercial Investment, and a Debt of Four Millions
be incurred, would not Two Millions of that Four be charged to
Territory, and the other Two, being required to make good the
Defalcation of Revenue, in consequence of the Commercial
Investments, be also charged to Territory?

The Question I presume supposes that a Loan of Four Millions
was necessary for the Purposes of the State; Two Millions to
meet local Expences, and Two to cover Territorial Charges in
England by Investment in Goods. But on the Presumption of
there having been a Surplus Revenue throughout the whole of the
Period here adverted to, there would have been a Sufficiency of
Territorial Funds to have answered the whole Expenditure of Four
Millions, without the Necessity of a Loan; it therefore follows
that all borrowing in such a Case is or ought to be considered
purely Commercial.

In that Answer you first suppose that there has been a Territorial Surplus, at which Supposition you only arrive by striking out
the whole Interest of the Debt from the Charge on the Territory
of India; then you say, that there having been this Surplus, at
which you only arrive in that Manner, all Debt incurred must have
been for Commercial Purposes?

I think I have clearly proved, in the Publication before referred
to, that there was a Surplus Revenue in India to a very large
Amount between the Years 1793 and 1808-9. If then that Surplus
Revenue really existed, what I contend for is, that there could have
been no Occasion for borrowing Money for Political Purposes;
and consequently, that if the Principal of the Loans in India does
not attach to the Territorial Department, neither can the Interest
upon those Loans; and these are the Grounds which induce me to
think the Interest on Debts should also be excluded from the
Statement No. 2. now before me.

You have been asked whether you are not aware that previous
to 1813 the Commercial and Territorial Accounts were confounded,
and that therefore it was extremely difficult to discover what was
the actual Surplus of Territorial Revenue, what Portion of the
Investment proceeded from the Application of Commercial Funds,
and what Portion from the Application of Territorial Funds, in
Repayment of Territorial Advances?

[495]

As the Accounts now stand, there is some Difficulty in separating the Territorial from the Commercial Departments; but the
Territorial Accounts, being the simplest, are more capable of
being analysed than the Commercial; and according to the View
which I have taken of the Revenue Accounts, particularly of this
Account, No. 2, which is in fact a Cash Account of Receipts and
Disbursements, the Surplus which I have contended for clearly
exists. It might be shewn or corroborated by other Statements
prepared also from these Accounts. I hold one in my Hand, a
Statement taken from the Accounts contained in this Collection,
which strongly corroborates my View of the Account No. 2, but
it is not sufficiently precise to be considered as a perfectly accurate
Statement, inasmuch as it admits of various Adjustments, but it will
serve to shew, as a general Result, that there has been throughout
the whole of the Period adverted to from 1793 to 1827-8, inclusive, an Increase of Debt far beyond what can be accounted for
by the Excess of Political Charges. In this Statement I take the
Accounts as they are exhibited in this Collection, and without
making any Deduction on account of the Interest on Debts; and
it stands as follows:

On the 30th of April 1793, the Indian Debt is stated, in Appendix No. 7. to the Second Report of Select Committee, to have been

£ 7,971,665

Ditto - 1809 - Ditto - as per Ditto

- 30,876,788

Net Increase -

- 22,905,123

Whilst the Excess of Political Charge, as per No. 6. of Appendix to the same Report, and No. 11. of the Third Report for the same Period, was only - -

£5,078,015

And the Political Charges paid in England, as per No. 46. of Appendix to Third Report, (the Committee however doubting whether the whole were properly chargeable to the Territorial Head,) - - - -

6,138,448

11,216,463

Difference to be accounted for

- -£11,688,660

So that 'the Amount of Loans had exceeded the Total Amount
of Surplus Charges during that Period in no less a Sum than
£11,688,660. This is the Result of the Official Documents
referred to, without a single Deduction on account of Interest,
or of any other Charge contained in the Official Documents.
Again-

On 30th April 1827, the Indian Debt is stated, in No. 4. of Papers relating to the Finances of India, &c. February 1830, to be

- -

£42,870,876

Making therefore the Increase of Debt since 1793

£34,899,211

Now, as the Surplus Charge from 1809-10 to 1826-27, as per No. 2. of the same Papers, &c., is only

£13,589,894

And the Surplus Charge of the former Period, as above

11,216,463

24,806,357

There is still a Difference to be accounted for of

£10,092,854

That is the Difference by which the Increase of the Debt in
India has exceeded all the Political Charges included in these
Official Documents.

That is taken from the Accounts of The East India Company?

It is.

Your own View, and your own Statement goes much beyond
that?

It does; for this is a Surplus after paying the whole Interest,
together with every other Charge claimed to be Political; whereas
if the Column of Interest were excluded from the Account the
Surplus would be much greater. (fn. 3)

You are aware that when the Territorial and the Commercial
Accounts were separated, it was understood by the Board of
Controul that the Debt of India was a Charge upon the Territory;
but it never was determined, nor has been to this Day, whether the
Bond Debt in England is a Commercial or a Territorial Debt, or
in what Proportions to be divided between those Two Accounts,
the Company declaring that the Loss is chargeable to the Territory,
it having been held by the Board that if not the Whole certainly
a Portion is chargeable to Commerce?

[496]

I am aware that it is so stated in Memoranda appended to
Accounts, but the Interest on Bond Debt is nevertheless included
in the Company's Accounts under the Head of "Commercial
Payments;" and if my View of the Company's Accounts be correct,
and there be that Surplus Revenue which appears to me to be the
Case on a careful Examination of these Documents, then the whole
of the Debt both at Home and Abroad must be Commercial, and
can be nothing else.

You only arrive at that Surplus Revenue by taking it for granted
that the whole Debt is a Commercial Debt?

I do not exactly take it for granted, because I think I have
proved in the Publication before referred to, and in the Analysis
which I hold in my Hand, as well of the Account No. 2. as of
the former Period, that there has been a large Surplus Revenue
exhibited by the public Accounts since 1793 to the present
Time.

Are you aware that it has been stated to this Committee that
the Average Out-turn of the Rupee remitted in Goods, deducting
Interest, since the Commencement of this Charter, has been 2s. 2d.
69/100; and that the Rupee, if it had been remitted in Bills at a
Mercantile Rate of Exchange, drawn from Calcutta, deducting
Twelve Months Interest, included in the Rate, would have been
2s. 1d. 69/100; that the Difference therefore in favour of Remittance
in Goods is 1d. the Rupee; and that the Advantage derived by
the Company since the Commencement of the Charter from
remitting in Goods rather than Merchants Bills is £800,660?

I am aware that a Difference has been calculated in reference
to the Exchange, but I cannot say, from Recollection what that
Difference amounts to, upon the whole of the Company's Remittances from India.

Have you yourself looked at the Rates of Exchange which have
prevailed since the Commencement of the Charter, and formed
any Statement of the Average Rate which has prevailed since that
Period?

I know what the Average Rates of Exchange have been since
the Commencement of the present Charter; and from examining
such of the Company's Accounts as are in Print, I perceive the
Rates of Exchange at which the Indian Currency is therein
converted into Sterling Money; I am fully aware that those
Rates exceed the established or ordinary Rates of Exchange
between India and England in the latter Years, or from the Year
1817 or 1818.

Are you not aware that when in Evidence the Out-turn of the
Rupee is spoken of in Goods, no reference whatever is made to
the Rate of Exchange?

I have always understood that the Company represent themselves
as having sustained a considerable Loss in consequence of the
Rates of Exchange they are compelled to adopt.

The Loss the Company sustain by means of what is called the
Board Rate of Exchange is in the Repayment in India to them,
for their Advances for Territorial Purposes in this Country, of
a smaller Quantity of Money than they would receive if they
were repaid at the Mercantile Rate of Exchange at the present
Time; but that has no reference to the Profit or Loss in the
Remittance of their Revenue so received by them in India to
England in Goods; when the Out-turn of that Rupee is stated, the
real Result of the Mercantile Adventure is stated by which that
Rupee is remitted to this Country in Goods?

Then the Profit or Loss sustained on that Adventure must be
taken into account. The Remittance, when made in Goods,
must be profitable to yield them a better Rate of Exchange than
the ordinary Rate; but I have no Knowledge of this being the
Case.

[497]

When the Out-turn of the Rupee is spoken of as remitted in
Goods, no reference is made to the Rate of Exchange; it is considered to be One Transaction - the Remittance of the Rupee to
England in Goods; and when the Company speak of the general
Effect of their Operations, as Persons advancing here from Commercial Funds to the Territory, and receiving Repayment in India
at a fixed Rate of Exchange below the Mercantile Rate of Exchange;-in looking at the whole of their Transaction, beginning
in this Country with the Advance to Territory, and ending in the
Repayment in England according to what may be the Out-turn of
the Rupee, in that respect the Rate of Exchange is undoubtedly
taken into Calculation?

I do not exactly understand the Difference, or how the Company
in this respect arrange their Accounts.

Are you aware that there are Two Transactions before the
Company receive Payment in this Country of what they advance
from Commercial Funds in this Country for Territorial Purposes?
That the first Transaction is the Advance in this Country of its
Funds, and the Repayment in India of those Funds by the Territory at a fixed Rate of Exchange; that at present upon that first
Transaction there is considerable Loss, the Board Rate of Exchange being much more unfavourable than the Mercantile Rate of
Exchange? Then the second Transaction consists in the Remittance to England in Goods or in Bills of the Sums received by the
Company in India from the Territory, in Repayment of those
Advances made on the Territorial Account in England. On that
second Transaction there may be a Loss, or there may be a Profit;
but in considering the Result of that Transaction it is not necessary
to look at the first Transaction, which terminates in the Repayment in England of the Sums advanced here for the Territory; but
that the Company, when they look at the whole Result of the
Account, beginning with the Advance in this Country of the
Funds for Territorial Purposes, and ending by the Repayment in
this Country of the Sums so advanced, must undoubtedly place
against whatever Profit they may make by Remittance to England,
and repaying Goods, whatever Loss they may sustain by the unfavourable Rate of Exchange in the first Transaction; or, if there
be Loss in the second Transaction, to that Loss they must add the
Loss sustained in the first?

In the Way in which the Accounts are now stated to be kept,
the Loss on the first Transaction adverted to in the Question would
appear to be sustained; but according to my View of the Case the
Advances for Territorial Charges in this Country are made in the
first instance out of the Revenues of India, and remitted in the
Shape of Goods to this Country; as to which Mode of Remittance
there has been sustained a considerable Loss also, as certified in
No., of "Accounts and Papers, March 1830." I should however consider the whole as One Transaction, for which Commerce
receives Advances in India at certain Rates of Exchange; and if
the Company have chosen throughout the whole of the Period of
their last Charter to make their Remittances in Goods, notwithstanding the obvious Losses which they have sustained in each
Year, as well in Exchange as by the Sale of Goods in this Country,
they must be content to bear that Loss, more especially as the
Law leaves the Mode of Remittance optional with themselves. It
cannot, in my Opinion, at all attach to the Territorial Account,
where I know it is wished to affix it.

Are not those Funds, which are produced in this Country by
the Remittance of Goods purchased by Payments in India by the
Territory in Repayment of Advances made by the Commerce in
this Country for Territorial Purposes, properly Commercial Funds?

The Accounts are so stated, I am fully aware; but my Belief is,
that those Funds are not the Result of actual Commercial Capital,
but wholly supplied from the Revenues of India in the first instance;
in other Words, that the Revenue supplies the Commerce with the
Means of carrying on all its Commercial Transactions.

That is by Repayments?

For every Purpose, including the Charges incurred in this
Country.

Do you suppose that the Company never made an Advance for
Territory from Commercial Funds?

It really does not appear from these Accounts that they have;
that is, from Funds arising out of a real circulating Commercial
Capital.

In what Manner must their Advances for Territorial Purposes
have been originally made, when, being a Commercial Body, they
assumed the Character of a Power in India?

[498]

There are several authentic Publications extant to prove that the
Company's Trade was most amply if not entirely supplied with
Funds from the Revenue ever since their Acquisition of Power in
India, or from the first of the Dewanny Grant in Bengal. I
conceive therefore that the whole of their original Commercial
Capital is now either dissipated or fixed in Buildings and other
Articles of Dead Stock; and that the whole of the active Capital
for Commercial Purposes is from Year to Year supplied by the
Revenues of India, and the Revenues alone.

Are you of Opinion that the Indian Trade, previous to 1813,
was an unprofitable Trade?

Quite so.

That the China Trade was equally so?

The whole Trade taken together I believe to be unprofitable.
I have an Account before me for the Year 1828-29, lately printed,
which clearly shews it.

That those Two Trades have been constantly unprofitable?

Yes; and the Fact may be further inferred from The East India
Company having never furnished yet to the Public such an Account
as I think the Public has a Right to expect of the Out-turn of
their Commercial Operations. There is in fact no Commercial
Account of the Company's before the Public that can satisfy a
Merchant of the Result they contend for, or the Realization of
actual Commercial Profit.

If that be the Case, how do you arrive at the Conclusion you
do upon the Subject?

I speak of the Commercial Accounts as being in so obscure a
State that no satisfactory Result can be drawn from them; but
from the Revenue or Territorial Accounts I think a more satisfactory Result can be drawn; and the Result which appears to me
to be the only One deducible from the printed Revenue Accounts
is the One which I have this Day given to the Committee.

If previous to the Year 1813 the Commercial Accounts of the
Company were unintelligible, and were at the same Time mixed
up with the Territorial Accounts, before the Separation of the
Two Accounts under the Act of 1813, must not the whole Account
be unintelligible, and must it not be impossible to come to any
correct Conclusion upon those Accounts?

This Account, No. 2, is a clear Account as far as it goes; it is
a Cash Account of actual Receipts and Disbursements; and all I
should say with regard to this Account is, that it does not contain
all the Receipts which it ought to contain for the Purpose of this
Inquiry, and therefore does not exhibit so large a Surplus as might
be deduced from it under certain Adjustments. I should make the
same Remark in respect to a similar Account which was laid before
the Select Committee of the House of Commons of 1810, extending from the Year 1793 to the Year 1808-9, inclusive. That
Account, as well as the One now before me, was an actual Cash
Account of Receipts and Disbursements, and the Result of it was
precisely that which I have already explained.

What Receipts are there which in your Opinion ought to have
been entered into this Account which are not here?

[499]

In the Account No. 2. there is a Note referring to the Year
1822-23, stating, "in this Year the Balance of the Loan of
£2,500,000 obtained from the Public in 1812 was discharged,
which amounted to £557,335." Now it appears from an Act
which I hold in my Hand, the Act of 3d George the 4th, Chapter 93,
that this was a Loan made to The East India Company in the
Year 1812, and that in 1822-23 this Loan was reduced by sundry
Payments to £1,857,322, and that it was discharged partly by a
Claim on the Part of the Company against the Government to the
Amount of £1,300,000 for sundry Expences incurred by them on
account of His Majesty's Government in India and at St. Helena,
when the Balance, or £557,335, was paid in Cash, and therefore
included, as well as the former Sum, under the Head of the Charges
of this Account. If then the whole of that Loan was liquidated,
as would thus seem to be the Case, by Charges contained in this
Account, it is but fair that the Account should also have Credit
for the Sum borrowed; whence, if this £2,500,000 be added to
the Receipts, it would make the Surplus so much larger.

Does it appear that this Account contains in any one Year a
Statement of the Sum raised by Loan either in India or in
England?

That is precisely the Defect. I think it ought to contain the
Receipt of that £2,500,000 in 1812, since the Liquidation of that

Loan appears to be contained in these Charges, or else that Portion
of the Charges should be deducted.

Will you refer to No. 20. of the Accounts, and state whether the
Receipt of that Sum of £2,500,000 does not appear as a Loan
from the Public in the Year 1822-23, as one of the Receipts?

It appears in that Account as a Loan in 1812; it is also continued in the Accounts Nos. 21. and 23. throughout the Years 1815
to 1822 inclusive, when it appears to have been finally discharged in
the Way I have just mentioned; but the Discharge of it being
included in the Political Charges of the Account No. 2, it appears
to me that the original Sum ought similarly to be included in the
Receipts.

Do you not find, on referring to No. 2, that that is a Statement
of Revenues and Charges of the several Presidencies of India,
and that the Account No. 20. is a general Statement, shewing
the Amount of the Proceeds of the Sales of Goods and Merchandize
of The East India Company in Great Britain, and of their
Commercial and other Receipts, Charges and Payments in Great
Britain?

If the Receipt could not have appeared under both those
Accounts, the one referring to European and the other to Indian
Receipts, the Payment appearing in the Indian Payments, inasmuch as it must have been a Remittance from India to discharge a
Debt incurred in England, yet if the Receipt could not appear under
Receipts in No. 2, ought the Charge, in your Opinion, to be
included in No. 2?

I think the Charge should not be included; or, if it is, that the
Receipt should also be included.

Does it appear to you that there are any Items of actual Receipt
not from Loan which are not brought into this Account?

I was going to explain Two other Items, which may be said to
have been omitted, or rather which may fairly be added in the Way
of Adjustment, in this Account No. 2; the one is referred to in
the following Note; referred to from the Year 1823-24: "If the
Sum paid to The Nizam in this Year for the Redemption of the
Peshcush were excluded, there would be shewn a Surplus Revenue
in 1823-24 of £473,722." This Peshcush or Tribute, payable
annually to The Nizam, was bought up in the Year 1823-24 for a
Sum of Money equal to Sixteen Years Purchase, or £1,201,201, as
exhibited in the Account No. 2. B. It would be perhaps more
correct to spread this Sum of £1,201,201 over the Sixteen Years,
instead of placing it all into One Year at the End of the Account
No. 2, so as thereby to magnify these Charges; I admit nevertheless
that it was a Cash Payment made in that Year, and therefore I
would not contend for any Sum on this Account being absolutely
added to the Surplus; but if it were so spread over the Sixteen
Years to which I refer, there would then only be a Portion of it
chargeable to this Account No. 2, whilst £840,841 would remain
to be placed to the Account of subsequent Years; this therefore
may be either omitted or included; I merely remark upon it here,
to explain the Memorandum, and the Nature of this particular
Item of Charge; but there is another Sum adverted to in these
Accounts, which is a Loan from The Nabob of Oude in 1815-16
of £1,109,975.

[500]

Where does that appear?

That will be found to be more particularly explained in No. 1. A.
This Sum, as stated in the Note to the Account to No. 1. A,
"was commuted for Territory by the Treaty of 1st of May 1816;
the Amount may therefore be considered as a Deduction from the
Charges of the War against Nepaul, from which State the Territory
was conquered, and as increasing the Bengal Surplus Revenue to
£3,051,442," instead of £1,941,467, given as the Surplus of that
Year. Now as that Sum of £1,109,975, or the Equivalent
thereof, is obviously included in these Charges also, inasmuch as it
constitutes a Portion of the Expences of the Nepaul War, so I think
ought the Sum itself to be included in the Receipts. These are
Items which present themselves on the Face of the Accounts before
me; there may be others which would admit of being added to
this Account in the Way of Adjustment, but of which I have
no Knowledge from Official Documents; but according to the
Analysis which I have just given in of this Account, the total actual
Surplus for the Nineteen Years included in it would amount to
£21,194,226, if the whole Adjustments be admitted, or to
£17,853,385, if Nos. 1. and 2. be excluded.

You have stated that the Commercial Accounts of The East India
Company are so kept as to give no intelligible Results; could you
give the Committee the Form of an Account which, if filled up
from the Documents in the India House, would give that intelligible
Result?

I could not do that here; it would require some Time to consider
the Form and Matter of an Account of such complicated
Commercial Transactions as those of the Company appear to be;
but if the Books at the India House are kept as the Accounts of
Mercantile Establishments generally are, there can be no Difficulty
in making out such an Account.

When I was last before the Committee, having urged in my
Statement respecting the Revenue System of India the great
Importance of particular Attention, as well to its Principles as to its
Effects, I could wish, with Permission, to say a few Words in addition to my former Evidence on this Subject.

[501]

The Matters requiring most Attention, as regards the Revenue
Systems, may be classed under the following Heads:-First, Our
Revenue Systems owe their Origin to Laws and Principles peculiar
to our Predecessors the Mussulmans, according to which the Ruling
Power assumes the Right of being acknowledged sole Proprietor of
all the Lands in his Dominions: Secondly, As a merciful Consideration for saving the Lives and granting Freedom to conquered
Subjects, the Mussulmans also enacted, that One Half the Gross
Produce of the Soil should be the Share of the Sovereign; in the
Enforcement of which Rent and Revenue came to be confounded,
and the whole Class of Landed Proprietors, properly so called,
annihilated, or reduced to Beggary, or to become cultivating
Tenants, or Labourers, on their own Estates: Thirdly, That the
Company's Government adopted these Principles on succeeding to
the Dewanny in Bengal in 1765, as well as in other Provinces of
India which have since submitted to our Arms, without, however,
attaching to them the Condition of either Loss of Life or of Personal
Freedom: Fourthly, That Half the Gross Produce of the Soil of
extensive Dominions being utterly incapable of Ascertainment, the
Imposition of such a Rate as a Land Tax could never be otherwise
than unequal in the extreme, and the Collection of it arbitrary and
vexatious: Fifthly, That the extreme Pressure of this exorbitant
Revenue has for Ages kept down, and still keeps down, the great
Mass of the Native Inhabitants in the lowest Stages of Poverty and
Ignorance: Sixthly, That Hosts of Native Servants in subordinate
Situations, and with low Salaries, are necessarily employed to
collect this most oppressive and unequal Tax, whose Acts no
Vigilance on the Part of Collectors or Judges has hitherto been able
to controul, and whose Extortions on Private Account, in addition
to the Public Revenue, add irremediably to the Wretchedness and
Poverty of the People: Seventhly, That besides the excessive
Pressure of this Tax, Government, in the Exercise of its Sovereign
Proprietary Right, has transferred, by free Grant in some Instances,
and by Sale in others, vast Tracts of Country from its ancient
Hereditary Possessors to Persons named Zemindars, i. e. Collectors,
and to absolute Strangers, which the ousted lawful Proprietors
consider, in their present State of habitual Poverty, to be a greater
Calamity even than the Tax itself.

Of these Facts abundant Proofs are now extant in various
authentic Writings, and more especially in Four Folio Volumes of
Revenue and Judicial Selections from Indian Records, printed by
the Court of Directors, and liberally circulated for the Use of their
Servants Abroad; and were I to quote what these Volumes contain
in Evidence on the Subjects adverted to, it would only be to fill
another. I shall therefore confine myself to a short Remark on the
last Head, as connected with other Parts of my former Examination.
When the Zemindarry Settlement was introduced into Bengal, the
Lands were made over in full Proprietary Right to Zemindars,
Hereditary Collectors under the Mussulman Administration, from
our being then ignorant that actual Proprietors existed, called in
Bengal Village Zemindars, Cultivating Zemindars, Village Proprietors, &c. Subsequent Inquiries, however, have brought to
Light that these Proprietors had managed to preserve a Record or
undisputed Tradition of their Rights throughout all the Rigour of
Eight Centuries of Mohamedan Sway; but from the degraded State
to which these Proprietors under the Operation of the Revenue
System were reduced in 1793, they were overlooked, and their
Lands transferred in Perpetuity to others. My Lord Hastings,
then Lord Moira, on a Tour of Inspection through the Inner
Provinces, expresses himself on this Head in the following Terms:
"Within the Circle of the Perpetual Settlements the Situation of
this unfortunate Class is yet more desperate; and though their
Cries for Redress may have been stifled in many Districts by their
perceiving that uniform Indisposition to attempt relieving them
which results from the Difficulty of the Operation, their Sufferings
have not on that Account been the less acute. In Burdwan, in
Behar, in Cawnpore, and indeed wherever there may have existed
extensive Landed Property at the Mercy of Individuals (whether
in Farm or Jaghire, or Talook or Zemindarry,) of the higher
Class, Complaints of the Village Zemindars have crowded in upon
me without Number; and I had only the Mortification of finding
that the existing System established by the Legislature left me
without the Mans of pointing out to the Complainants any Mode
in which they might hope to obtain Redress. In all these Tenures,
from what I could observe, the Class of Village Proprietors
appeared to be in a Train of Annihilation, and unless a Remedy is
speedily applied the Class will be soon extinct. Indeed I fear that
any Remedy that could be proposed would even now come too late
to be of any Effect in the Estates of Bengal; for the Licence of
Twenty Years which has been left to the Zemindars of that
Province will have given them the Power, and they have never
wanted the Inclination, to extinguish the Rights of this Class, so
that no Remnants of them will be soon discoverable." In like
Manner, the Commissioners of the Ceded and Conquered Provinces, speaking of those Persons, remark, "The whole of this
valuable Class of Landholders may be considered to be extinct
in the Lower Provinces, in consequence of the Interpretation
put on the Title of General Zemindar, who was considered, by
the Terms of the Permanent Settlement, as the universal Proprietor of the Soil, and the Fountain from which alone any
other Person could derive a Property. "-Beng. Rev. Sel. vol. 1.
p. 361-371.

[502]

It is no doubt known to several Noble Lords of this Committee,
that Village Communities and other Associations exist among the
Natives, to which particular Rights and Privileges attach. Among
others, the Lands belonging to Villages are either a joint Property
or divided into separate Estates. These Proprietors in the Upper
Provinces of Bengal are called Malguzars. In the Settlements for
the Revenue the Head Man of the Village, or Sudder Malguzar,
is treated with and made responsible for the whole Amount. These
joint or Village Properties, have consequently been treated in many
Instances as one Estate, and in the event of the Sudder Malguzar,
failing in his Payment, the whole Village is sold to make good
Arrears; all the joint or minor Proprietors, the innocent and the
Defaulters, suffer together; their ancient Hereditary Properties
are lost to them, and made over, for a Price, generally to a
Stranger, by whom the real Landlords are then considered in no
better Light than mere Tenants at Will. Now, my Lords, it is
impossible that Acts of this kind could have occurred, and they
have unhappily been but too frequent, had we been better acquainted
with Native Usages, Institutions, and Rights-had our Intercourse
with the Natives been more intimate-or had Natives of Respectability and Character occupied Situations to enable them, either by
conveying Information, or in the Exercise of their Official Functions,
to check such Proceedings. But these Matters, with many others
of a like Import, have strongly impressed on my Mind the Necessity
of Native Co-operation and Aid, if we really mean to improve the
State of India and the Condition of its People. At all events, the
Experiment may be worth trying, since all other Means devised by
the ablest of our European Public Servants have hitherto proved
unsuccessful.

I was also asked whether I could suggest any Remedy for the
Evils complained of in the Revenue Administration. On which
Head I could not but feel diffident, as I still do, to offer Suggestions, where so many abler Persons have decidedly failed. One of
the great Objections to our Revenue Systems, as I then observed,
is the extreme Inequality with which an almost intolerable Tax
presses on the great Body of the Community. There are Instances
on Record of large Fortunes having been made by Dewans,
Serishtadars, &c. in consequence of fraudulent and partial Assessments; the many are thus overloaded with Taxation to favour the
Frauds and Corruptions of a few; and the Continuance of these
Practices is not a little promoted by the utter Despondency into
which the Ryots are thereby plunged. Its Effects cannot be better
described than in the Words of the late Sir Thomas Munro:-
"It is," he says, "well known that the great Body of the Ryots
will submit to extra Assessments as long as they can pay them,
rather than seek Redress from the Courts. There cannot be a
stronger Proof in support of this Observation than the Occurrences
in Coimbatoor for some Years past; where, though at least
30,000 Ryots have paid extra Assessments, and Numbers have been
compelled to part with their Sheep and Cattle without Compensation, very few of all this Number, probably not Twenty, have
ever sought Redress from the Zillah Court, though the Judge is
acknowledged to be a most active and zealous Public Servant. It
is therefore impossible to resist the Conclusion, that our Institutions
are inefficient, and that the same Abuses, to a greater or less
Extent, must prevail in every Province under this Government."
All I would venture to add on this Subject is, that through the
Medium of Village Communities and other local Associations, and
with the Co-operation and Aid of respectable Natives, employed
and controuled as before suggested, it is hoped that some Equalization of the Assessment, as well as some Mitigation at least of the
other Evils of our Revenue System, may be effected; but I must at
the same Time confess that I should be apprehensive neither this
or any other Series of Measures will succeed, unless Confidence can
at the same Time be generally inspired that the Land Tax or
Aggregate Amount of Land Revenue will never be raised on the
Inhabitants, but, on the contrary, gradually reduced.

Have any Circumstances lately come to your Knowledge which
induce you to think that a more extended Residence of Europeans
in India would be agreeable to the well-informed Natives, and be
considered by them of Advantage to the Country?

[503]

There have, since I was examined on a former Day. The Circumstances I allude to are Facts which Two Natives of Rank and
Intelligence are reported to have attested as the Result of their own
personal Observation; and as Facts are of more Importance than
Reasoning, I would beg leave to submit them, as a better Answer
to the Question than any Opinions of mine. They may perhaps
be the more deserving of your Lordships Attention, from the
very uncommon Circumstance of their having been detailed in
elegant English Speeches delivered by the Natives in question at a
Public Meeting of the Inhabitants of Calcutta, on the Question
of petitioning Parliament with reference to the Discussions
pending in this House. One of then, Dwarkanauth Tagore, said,
"With reference to the Subject more immediately before the
Meeting, I beg to state that I have several Zemindarries in various
Districts, and that I have found the Cultivation of Indigo and
Residence of Europeans have considerably benefited the Country
and the Community at large; the Zemindars becoming wealthy
and prosperous; the Ryots materially improved in their Condition,
and possessing many more Comforts than the Generality of my
Countrymen where Indigo Cultivation and Manufacture is not
carried on; the Value of Land in the Vicinity to be considerably
enhanced, and Cultivation rapidly progressing. I do not make
these Statements merely from Hearsay, but from personal Observation and Experience, as I have visited the Places referred to
repeatedly, and in consequence am well acquainted with the
Character and Manners of the Indigo Planters. There may
be a few Exceptions as regards the general Conduct of Indigo
Planters, but they are extremely limited, and comparatively
speaking of the most trifling Importance. I may be permitted to
mention an Instance in Support of this Statement. Some Years
ago, when Indigo was not so generally manufactured, One of my
Estates where there was no Cultivation of Indigo did not yield a
sufficient Income to pay the Government Assessment; but within a
few Years, by the Introduction of Indigo, there is now not a Bega
on the Estate untilled, and it gives me a handsome Profit. Several
of my Relations and Friends, whose Affairs I am well acquainted
with, have in like Manner improved their Property, and are
receiving a large Income from their Estates. If such beneficial
Effects as these I have enumerated have accrued from the bestowing
of European Skill on One Article of Production alone, what further
Advantages may not be anticipated from the unrestricted Application
of British Skill, Capital and Industry to the very many Articles
which this Country is capable of producing, to as great an Extent
and of as excellent a Quality as any other in the World, and which
of course cannot be expected to be produced without the free
Recourse of Europeans."

The other was an Individual whose Name is well known in this
Country; the celebrated Rammohun Roy. He is reported to have
said, "From Personal Experience, I am impressed with the Conviction, that the greater our Intercourse with European Gentlemen
the greater will be our Improvement in Literary, Social and
Political Affairs; a fact which can be easily proved by comparing
the Condition of those of my Countrymen who have enjoyed this
Advantage, with that of those who unfortunately have not had that
Opportunity; and a Fact which I could to the best of my Belief
declare on solemn Oath before any Assembly. I fully agree with
Dwarkanauth Tagore in the Purport of the Resolution just read.
As to the Indigo Planters, I beg to observe, that I have travelled
through several Districts in Bengal and Behar, and I found the
Natives residing in the Neighbourhood of Indigo Plantations
evidently better clothed and better conditioned than those who lived
at a Distance from such Stations. There may be some partial
Injury done by the Indigo Planters; but on the whole they have
performed more good to the Generality of the Natives of this
Country than any other Class of Europeans, whether in or out of
the Service."

[504]

The Facts contained in these Addresses completely verify what I
ventured to predict in 1813, as to the Effect which the opening of
the Trade to India would have in lightening the Pressure of the
Zemindarry Tax. The Speeches may also be taken as a Specimen
of what the Natives are capable, and received in Connection with the
Recommendation I have taken the Liberty to offer, for a more
extended Employment of them in high and responsible Offices. In
forming my Opinions on this Head, I have not disregarded those
of an opposite Tendency by distinguished Public Servants in India,
whose Experience has led them to think differently of Native Probity
and Efficiency; but whatever Faults or Defects may be observed in
them now, from long-continued Habits, arising out of the Nature
of the Government by which they have been ruled, I am persuaded,
that when our Intercourse with the Natives is more intimate-
when high Offices are opened to their Ambition, and Seminaries for
their Improvement-when enviable Distinctions are found to be
the Reward of Talent and Integrity, and Shame or Punishment to
be the End of vicious Conduct-Character will become of greater
Value among themselves; neither can I perceive any just Grounds
for apprehending why the same Causes, the same Hopes and Fears,
which generate high Principles in other more enlightened Societies,
should fail, under like Circumstances, equally to influence the
Conduct of Native Indians.

The Witness is directed to withdraw.

Ordered, That this Committee be adjourned to Friday next,
One o'Clock.